Uber launches online campaign against rules to curb surge pricing

Days after the government issued guidelines to rein in cab aggregators, the companies are blatantly flouting them. Uber has gone a step further - it has launched an online campaign against the rules that curb surge pricing.

On Wednesday, the company shot off emails to its users in Bengaluru, analyzing their expenditure on rides between January and March. It said fares fixed by the government would drill a deeper hole in commuters' pockets, backing the claim with figures.

The email titled "Why pay more for a less reliable ride" tells the user that he/she would have to spend up to 30% more if they paid according to the rates suggested by the government.

However, while making the calculations, Uber seems to have conveniently taken into account the maximum fare fixed by the government (per km) and the cheapest rides availed by the user. Hence, the stark contrast in expenditure.

On April 2, the state transport authority (STA) implemented the Karnataka On-demand Transportation Technology Aggregators Rules 2016 which prevents companies from charging more than Rs 19.50 per km for AC cabs and Rs 14.50 for non-AC ones. The fare per km must be inclusive of all charges/taxes.

Both Ola and Uber have been charging a base fare of Rs 40 - Rs100 and waiting time fare (in case passenger gets late by more than 5 minutes after cab has reached his/her doorstep). This is apart from surge/peak hour pricing under which the commuter has to cough up double or more during peak hours.

"Surge pricing is a relative term. It depends on the demand for cabs and their subsequent supply. When the demand for cabs in a particular area is high, there is an automated surge in the rates to make more cars available to passengers. Uber's aim is to provide cabs within four minutes even when the demand is high. In this case, surge pricing will definitely come into play but the amount charged will not be as high as the government prescribed rates," said Bhavik Rathod, general manager, south and west India, Uber.

According to the aggregator, from January to March, passengers who travelled by other vehicles (following government rates) ended up paying at least Rs 25 crore more collectively."Majority of Uber rides, even with surge pricing, work out to be cheaper than those based on the government prescribed rates. All the government has done is fixed a higher cap without placing much focus on dynamic or surge prices," says Rathod.

HG Kumar, additional commissioner, State Transport Authority, said, "We are not in a position to entertain a fresh list of objections after the law has been implemented. If it is revealed that these companies have not applied for their licences as per the rule, they are liable to pay a huge amount of fine and serve jail term under section 183 of IPC."

Excerpts from a mail

Why Pay more for Less Reliable Ride? With Uber you can always push a button and get a ride within minutes wherever you are in the city and at whatever time. That's only possible because Uber can vary prices to meet changes in demand.

But the regulations notified by the government of Karnataka that fix prices will end the reliable, convenient Uber you know and love. It will be back to the days of taxis when you couldn't get a ride in the rain, after a cricket match, late at night or outside the city center.

What's more, we've looked at the numbers and the government's proposal to fix prices will cost you more overall for a less reliable, convenient service.

On other alternatives that follow the government's suggested prices, you could have spent up to 30% more for the same number of Uber rides you've taken since the start of the year.

You have taken 27 rides on Uber since Jan 2016 and spent Rs 4,539

With the government suggested prices, you will have to spend Rs 7,635 for the same distance.

The actual BBC story is headlined "School spending: Multi-billion pound cash boost announced," and instead puts the number at £7.1 billion, criticizing the government's use of £14 billion pound figure as not the usual way of calculating spending

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